Mortgage applications increased 13.2 percent from last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 18, 2011.
The Market Composite Index, a measure of mortgage loan application volume, increased 13.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous week. The Refinance Index increased 17.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier. The unadjusted Purchase Index increased 9.6 percent compared with the previous week and was 6.9 percent lower than the same week one year ago.
“Ongoing turmoil in the Middle East brought interest rates lower last week. Borrowers took advantage of these lower rates, bringing application activity back near levels from two weeks ago, following sharp declines last week,” says Michael Fratantoni, MBA’s vice president of research and economics.
The four week moving average for the seasonally adjusted Market Index is up 1.9 percent. The four week moving average is up 1.6 percent for the seasonally adjusted Purchase Index, while this average is up 1.8 percent for the Refinance Index.
The refinance share of mortgage activity increased to 65.7 percent of total applications from 64.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent from 6.0 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.00 percent from 5.12 percent, with points increasing to 0.97 from 0.85 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.28 percent from 4.34 percent, with points decreasing to 0.80 from 0.85 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.
The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.